#3Sig-menu(articles)

Thoughts On The Iraq War: Part 4

I have a backlog of excellent comments from readers on the Iraq war. I will be posting them from time to time, as I think analysis of geopolitical events is important to successful investing.

Beyond that, the topic warrants attention on its own, apart from any value it may bring to the investment table. Life is not just about profit and loss of money, it’s about national character, lives on the line, global reputations, and the spirit of a nation.

What’s the spirit of our nation? When we look into our national heart, can we say that we can be counted on to do the right thing in most cases? I was raised to believe so, and in particular our involvement in WWII — one of the highest points in our history — led me to think that the world could count on us.

As they say, it ain’t your grandfather’s government anymore.

Before today’s comments, I should point out a couple of errors I made in Monday’s article:

I wrote that my grandfather flew B-52s in WWII, which of course should have been B-29s. B-52s didn’t fly until 1955.

My edits of Bruce’s comments incorrectly described his family. The summary should have read, “I come from a family where my father was drafted into service in WWII, had four children, was wounded in action in France, served willingly, and all four of his sons volunteered for service (two during war and have no regrets and are proud of it). I am one of those four sons.”

I corrected both errors in the original article.

Bruce got back to me with a follow-up:

You wrote, “America is the greatest country on Earth, yet it hasn’t had a proud military moment in two generations. That stinks.”

We don’t fight wars today like we did then. Ask the people of Japan about atomic bombs, fire raids, massive destruction, and thousands upon thousands of civilian deaths. Today we play PC and put our soldiers at risk. By the way, how many bases and personnel do we have in Japan, Germany, Korea and elsewhere and how long have we been there?

Unfortunately, we have to be seriously hurt and endangered to fight the kind of war we did then, and we will when the big hurt comes and the people demand that the threat be ended!

I was surprised to read on page 463 of Alan Greenspan’s book, The Age of Turbulence that he says the war in Iraq was always about oil, and that everybody knows that.

Alan wrote:

The TV showers us all with “details at 11” which aren’t details at all. They hype news stories as if they had any direct bearing on our lives which, on average, they don’t.

I’ve discovered that with most stuff that happens, it’s best to ignore all media reports for six months and after that the truth will start to leak out or there will be enough “facts” around to start to draw some kind of rational conclusion. Took me most of my 62 years to figure that out — “Too soon old; too late schmart,” as the Pennsylvania Dutch saying goes.

Long after the Vietnam war ended, a report crossed my desk pointing out that the continental shelf off Vietnam just might have had a lot of oil under it, as many other continental shelves have proven to have. Funny thing, that; why were we there, again?

Ditto the Falkland Islands War of the early 80s. Why did Argentina attack a small, peaceful, very British bunch of islands like all get-out? Continental shelf connects the Falklands with Argentina, and Argentina, at the time, had virtually no native oil fields.

Why did everyone want a stake in Antarctica? Massive coal deposits, way under the ice. Not economically feasible to recover 25 years ago, or 15 or five, but maybe some day. That’s why so many nations have “research stations” on the continent. Not exactly for research, but to put down a footprint. I learned that from the naturalists on a Lindblad cruise to the Falklands and the Antarctic peninsula just after the Falklands war ended.

The Argentineans also carpet-seeded the Falklands’s countryside with land mines, most of which, for some peculiar reason, didn’t have metal detector rings on them, as the Geneva Conventions mandated. Many farmers were trapped in their homes for days or weeks with nothing to do but listen to their sheep being blown up when they stumbled across mines.

One thing to keep in mind is that fighting a war for oil does not automatically de-legitimize it. Oil is vital to our economy and, indeed, the world economy. People who don’t want to fight for oil are often the same people that oppose nuclear power, which is absurd. Nuclear is one of the best clean energy options we have, yet the mere mention of the word “nuclear” brings knee-jerk opposition from the uninformed that has kept nuclear only marginal when it should be the world’s main source of power.

What would you rather have, messy wars in oil-rich lands governed by nutcases to get our hands on an inefficient, dirty energy source, or a network of clean nuclear power plants that gets its uranium from stable countries like Canada and Australia? Here’s a nice write-up on the benefits of uranium for energy.

The problem with the Iraq war for oil is that it has made access to oil more precarious, not less. Meanwhile, the twin smokescreens of looking for weapons of mass destruction and bringing democracy to the Iraqi people were unnecessary and damaging to the reputation of the U.S. because they’re so patently absurd. Democracy to the Iraqi people? Come on.

Gary sent an interesting quote from Dick Cheney, courtesy of Joel Connelly at the Seattle Post-Intelligencer, who wrote, “The words of our future vice president — defending the decision to end Gulf War I without occupying Iraq — eerily foretell today’s morass. Here is what Cheney said in ’92:”

I would guess if we had gone in there, I would still have forces in Baghdad today. We’d be running the country. We would not have been able to get everybody out and bring everybody home.

And the final point that I think needs to be made is this question of casualties. I don’t think you could have done all of that without significant additional U.S. casualties. And while everybody was tremendously impressed with the low cost of the (1991) conflict, for the 146 Americans who were killed in action and for their families, it wasn’t a cheap war.

And the question in my mind is how many additional American casualties is Saddam (Hussein) worth? And the answer is not that damned many. So, I think we got it right, both when we decided to expel him from Kuwait, but also when the president made the decision that we’d achieved our objectives and we were not going to go get bogged down in the problems of trying to take over and govern Iraq.

Mr. Connelly followed Mr. Cheney’s quote with, “How — given what he said then — does Cheney get off challenging the judgment and strength of those who argue that we are bogged down and shedding blood today?” Here’s the full article.

Rob, whom I quoted in the original post about Iraq on September 11, wrote back:

I only question your patriotism when you suggest that your subscribers read a book with the title, The Ugly American. Isn’t it fair to assume that citizens of other nations have numerous reasons to dislike Americans other than legitimate things Americans have done or currently do? Don’t you think that certain stereotypes are supported by the forei
gn media?

The Ugly American is one of the best books ever written about American involvement overseas. It illustrates what other countries did well in Southeast Asia and what America did wrong. The title does not mean that Americans are ugly to others; it refers to a character in the book who really is ugly, is American, and is one of the few Americans to conduct foreign policy correctly by actually helping the locals instead of trying to ramrod expensive, worthless projects through, as most other Americans were doing at the time.

Some of the points made in the book are that most Americans abroad do not speak the local laguage, do not understand the local culture, and are arrogant in assuming that American culture is always the answer for every square mile on Earth. I would say those points are worth keeping in mind as America occupies Iraq with few people on the ground who speak the language or understand the culture.

I stand by that reading recommendation. It’s not insulting to Americans. It’s educational and consistent with what I’ve seen among Americans abroad.

Don’t take my word for it. Get a copy of the book, read it, and then let me know if you still think it’s unpatriotic to recommend such a classic title.

I’ll interview Neal Yanofsky, president of Panera this afternoon and have a report to subscribers over the weekend. If you’re missing out on the bull market, get onboard the letter now and you’ll receive this weekend’s note.

For just $200 per year, you’ll receive everything listed above to completely upgrade the way you manage your investments. This is 17% cheaper than the monthly option. This is what I recommend:

Option 2:Monthly Subscription (no refunds)

If you'd like to try The Kelly Letter without paying the full year, you can pay $20 per month.

Option 3:Free Email List

If you'd like to hear more from me but aren't ready to part with any money yet, you're welcome to join my free email list:

Join the free list

Thank you for the work you do. You're a household name here and my wife and I often discuss your letters on Sundays. My ten- and seven-year-old children recognize your name and will eventually be taught to invest using 3Sig and 6Sig. You've had an enormously positive impact on our investing and inspired me to look at the world in more rational and clear terms than I did years ago. I'm sure that thousands of others would say the same.

Matt BarnesProduct Line DirectorOCLC

Join Matt and thousands of other rational investors to invest without stress.